EXHIBIT 10.32

LOAN AND SECURITY AGREEMENT

This LOAN AND SECURITY AGREEMENT is made December 27, 2005, by and between DVL,
INC., a Delaware corporation having its principal place of business at 70 East
55th Street, 7th Floor, New York, New York 10022 (the "Borrower"), and PEMMIL
FUNDING LLC, a New York limited liability company (the "Lender").

WITNESSETH:

1. BACKGROUND

1.1 Defined Terms As used in this Agreement, the following terms shall have the
following meanings (all terms defined in this Article I or other provisions in
the singular shall have the same meanings when used in the plural and vice
versa):

      "Affiliate" - With respect to a specified Person, (i) a Person who,
directly or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with, the specified Person, (ii) any
Person who is an officer, director, partner or trustee of, or serves in a
similar capacity with respect to, the specified Person or of which the specified
Person is an officer, partner or trustee, or with respect to which the specified
Person serves in a similar capacity, (iii) any Person who, directly or
indirectly, is the beneficial owner of 10% or more of any class of equity
securities of, or otherwise has a substantial beneficial interest in, the
specified Person or of which the specified Person has a substantial beneficial
interest and (iv) the spouse, issue, or parent of the specified Person.

      "Business Day" - Any day on which banking institutions in New York, New
York, are open for the transaction of banking business.

            "Capital Transactions" - shall mean a sale, transfer, exchange or
other disposition, refinancing, financing, condemnation or casualty affecting
all or a portion of the Borrower's assets.

            "Change of Control" - shall mean an acquisition by an individual or
legal entity or group (as defined in Section 13(d) of the Securities Exchange
Act of 1934 (the "Exchange Act")) of more than 50% of the voting rights or
capital stock of the Borrower, other than any Permitted Holder.

            "Corporation" - S2 Holdings, Inc., a Delaware corporation

            "Governmental Authority" - Any foreign, federal, state, regional,
local, municipal or other government, or any department, commission, board,
bureau, agency, public authority or instrumentality thereof, or any court or
arbitrator.

            "Interest Rate" - 12% per annum, compounded monthly.

      "Lien" - Any mortgage, deed of trust, security interest, pledge,
hypothecation, assignment, attachment, deposit arrangement, encumbrance, lien
(statutory, judgment or otherwise), or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement, any financing lease involving substantially the
same economic effect as any of the foregoing and the filing of any financing
statement under the UCC or comparable law of any jurisdiction).

            "Loan Amount" - $2,500,000.00

            "Loan" - as defined in Section 2.1.

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            "Loan Documents" - This Agreement, the Note and any other documents
entered into in connection herewith.

            "Maturity Date"- December __, 2008

            "Net Proceeds" - The excess, if any, of (i) all cash amounts
received by the Borrower in connection with a Capital Transaction over (ii) the
sum of (a) all reasonable costs and expenses (including the satisfaction of any
debt that is the subject of such Capital Transaction) incurred in connection
with such Capital Transaction and (b) any payments required to be made by
Borrower from such Capital Transaction to the Gross Settlement Fund established
in connection with the disposition of the 1992 class action litigation in which
the Borrower was a defendant.

            "Note" - as defined in Section 2.6.

            "Obligations" - all of the indebtedness, liabilities and obligations
of the Borrower to the Lender, whether now existing or hereafter arising,
whether or not currently contemplated, direct or indirect, joint or several,
certain or contingent, matured or unmatured, liquidated or unliquidated, secured
or unsecured, arising by contract, operation of law or otherwise, arising out of
or incurred under this Agreement or the Note, including, without limitation, the
Loans, and including in every case interest thereon and all other amounts
payable in respect thereof pursuant to this Agreement.

            "Organizational Documents" - With respect to any Person, to the
extent applicable, its certificate of limited partnership, certificate of
formation, certificate of incorporation, limited partnership agreement,
operating agreement, by-laws and all other equity holder agreements, voting
trusts and similar arrangements applicable to the equity interests of such
Person.

            "Permitted Holder" means any Person or group that, as of the date of
this Agreement, beneficially owns (as defined in Section 13(d) of the Exchange
Act) greater than 10% of the Company's common stock.

            "Shares" - means 100 shares of common stock of the Corporation.

            "UCC" - The Uniform Commercial Code of the State of New York as in
effect from time to time.

      1.2 Borrower. Borrower is a corporation organized under the laws of the
State of Delaware.

      1.3 Use of Loan Proceeds. Borrower has applied to Lender for a loan of up
to TWO MILLION FIVE HUNDRED THOUSAND AND XX/100 ($2,500,000) ("Loan"), the
proceeds of which are to be used for the repayment of the Borrower's existing
indebtedness.

      1.4 Loan. Subject to all of the terms, conditions and provisions of this
Agreement, and of the agreements and instruments referred to herein, the Lender
agrees to make a loan to the Borrower in a principal amount equal to the Loan
Amount, and Borrower agrees to accept and repay the Loan.

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      1.5 Rules of Interpretation.

      (a) A reference to any document or agreement shall include such document
or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.

      (b) The singular includes the plural and the plural includes the singular.

      (c) A reference to any law includes any amendment or modification to such
law.

      (d) A reference to any Person includes its permitted successors and
permitted assigns.

      (e) The words "include", "includes" and "including" are not limiting.

      (f) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.

      (g) Unless otherwise expressly indicated, in the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including," the words "to" and "until" each mean "to but excluding,"
and the word "through" means "to and including."

      (h) This Agreement and the other Loan Documents are the result of
negotiation among, and have been reviewed by counsel to, among others, the
Lender and the Borrower and are the product of discussions and negotiations
among all parties. Accordingly, this Agreement and the other Loan Documents are
not intended to be construed against the Lender merely on account of the
Lender's involvement in the preparation of such documents.

      2. LOAN PROVISIONS.

            2.1 Amount of Loan. Subject to the terms and conditions set forth in
this Agreement, on the date hereof, the Lender agrees to lend to the Borrower an
aggregate amount equal to the Loan Amount.

            2.2 Maturity Date. The Loan shall mature on the Maturity Date.

            2.3 Interest Rate and Payment Terms. The Loan shall be payable as to
interest and principal in accordance with the provisions of this Agreement and
the Note. This Agreement also provides for prepayment rights.

                  2.3.1 Payment and Calculation of Interest. All interest shall
be: (a) payable in arrears commencing the first Business Day of the month
immediately following the month in which the Loan is made and on the first
Business Day of each month thereafter until the principal together with all
interest and other charges payable with respect to the Loan shall be fully paid;
and (b) calculated on the basis of a 360 day year and the actual number of days
elapsed; provided, however, that the Borrower shall not be required to make
monthly interest payments provided above except in connection with the mandatory
prepayments relating to a Capital Transaction required to be made under Section
2.3.3 hereof, and any accrued interest that is not paid when due as provided
above (subject to applicable grace periods under Section 5.1.1) shall be added
to the principal amount of the Loan.

                  2.3.2 Principal. The entire principal balance of the Loan
shall be due and payable in full on the Maturity Date.

                  2.3.3 Prepayment. The Loan or any portion thereof may be
prepaid in full or in part at any time upon fifteen (15) days prior written
notice to the Lender, without premium or penalty. The Borrower shall be required
to make a prepayment on account of the Loan upon the consummation of a Capital
Transaction which results in Net Proceeds received by the Borrower and such
prepayment shall be in an amount equal to 50% of the Net Proceeds received by
the Borrower. Any prepayment shall be applied first to interest and then to
principal.

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                  2.3.4 Maturity. On the Maturity Date all accrued interest,
principal and other charges due with respect to the Loan shall be due and
payable in full.

                  2.3.5 Method and Application of Payment; Date of Credit. All
payments of interest and principal shall be made in lawful money of the United
States in immediately available funds, without counterclaim or setoff and free
and clear of, and without any deduction or withholding for, any taxes or other
payments, unless required by applicable law. All payments received on account of
the Loan shall be applied first accrued and unpaid interest and then to
principal.

                  2.4 Acceleration. The Lender may, in its sole discretion,
accelerate the Loan after the occurrence and during the continuance of an Event
of Default.

      3. REPRESENTATIONS, WARRANTIES AND COVENANTS

            Section 3.1 Representations and Warranties. The Borrower hereby
represents and warrants to the Lender as follows:

                  3.1.1 Organization. The Borrower (1) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware, (2) has all requisite company power to own its property and conduct
its business as now conducted and as presently contemplated, and (3) is in good
standing as a foreign limited liability company and is duly authorized to do
business in each jurisdiction where such qualification is necessary except where
a failure to be so qualified would not have a material adverse effect on the
Borrower.

                  3.1.2 Due Execution. The execution, delivery and performance
of this Loan Agreement and the other documents entered into in connection
herewith to which the Borrower is or is to become a party and the transactions
contemplated hereby and thereby (a) are within the authority of the Borrower,
(b) have been duly authorized by all necessary corporate action, (c) do not
conflict with the Organizational Documents, or (d) do not conflict with, cause a
breach of default under or give any other entity or person a right of
termination, amendment or acceleration or cancellation of, or result in the
creation of a lien on any asset of the Borrower, pursuant to the terms of any
note, bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation to which the Borrower is a party or
by which the Borrower or any of its properties or assets is bound or affected,
except, in the case of this clause (e), as would not have a material adverse
effect on the Borrower.

                  3.1.3 Enforceability. The execution and delivery of this Loan
Agreement and the other documents to be entered into in connection herewith to
which the Borrower is or is to become a party will result in valid and legally
binding obligations of the Borrower enforceable against it in accordance with
the respective terms and provisions hereof and thereof, except as enforceability
is limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefore may be brought.

                  3.1.4 Consents. The execution, delivery and performance by the
Borrower of this Loan Agreement and the other documents to be entered into in
connection herewith to which it is or is to become a party and the transactions
contemplated hereby and thereby do not require the approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained, other than required filings with the Securities and Exchange
Commission.

                  3.1.5 Litigation. There are no actions, suits, proceedings or
investigations of any kind pending or threatened against the Borrower before any
governmental agency that, if adversely determined, might, either in any case or
in the aggregate, (i) have a material adverse effect on the Borrower or (ii)
materially impair the right of the Borrower and its subsidiaries, considered as
a whole, to carry on business substantially as now conducted by them.

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                  3.1.6 No Violations. The Borrower is not in violation of any
provision of its Organizational Documents, or any agreement or instrument to
which it may be subject or by which it or any of its properties may be bound or
any decree, order, judgment, statute, license, rule or regulation, in any of the
foregoing cases in a manner that could result in the imposition of substantial
penalties or have a material adverse effect on the Borrower.

                  3.1.7 Representations with Respect to the Shares. The Borrower
is the legal and beneficial owner of the Shares, and except for the lien granted
hereunder to the Lender, are owned by the Borrower free and clear of any pledge,
mortgage, hypothecation, lien, charge, encumbrance, security interest or other
encumbrance in such shares or the proceeds thereof. The pledge of the Shares
pursuant to this Agreement creates a valid security interest in such Shares as
security for the prompt and full satisfaction of the Obligations and the Lender
shall, upon delivery of such Shares to it, have a perfected first priority
security interest in such Shares. The Shares represent all of the issued and
outstanding stock of the Corporation.

                  3.1.8 Taxes. Borrower and has made all required tax filings
and have paid all federal, state and local taxes applicable to them and/or their
respective assets.

                  3.1.9 Bankruptcy Filings. The Borrower is not contemplating
either a filing of a petition under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of its assets or
property, and the Borrower has no knowledge of any Person contemplating the
filing of any such petition against any of the Borrower.

                  3.1.10 Options. No Person holds a right of first refusal or
option to purchase with respect to the Shares.

                  3.1.11 Investment Company. Borrower is not an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.

                  3.1.12 Holding Company. Borrower is not a "holding company,"
or a "subsidiary company" of a "holding company," or an "affiliate" of a
"holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, as amended.

            Section 3.2 Covenants. The Borrower covenants and agrees as follows:

                  3.2.1 Books and Records. The Borrower shall keep and maintain
proper and accurate books, records and accounts reflecting all of the financial
affairs of the Borrower and all items of income and expense in connection with
its business and operations and in connection with any services, equipment or
furnishings provided in connection with the operation of the business of the
Borrower, whether such income or expense is realized thereby or by any other
person or entity.

                  3.2.2 Tax Returns. The Borrower shall cause all tax returns
required to be filed by it to be filed on a timely basis and any taxes due on
account thereof to be paid on a timely basis, unless and to the extent that such
taxes are being diligently contested in good faith and by appropriate
proceedings and appropriate reserves therefore have been established.

                  3.2.2 Organizational Documents. Except with the prior written
consent of the Lender, the Borrower shall not permit to be modified, amended,
supplemented or terminated in any material respect, its Organizational
Documents, or any of them.

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                  3.2.4 Legal Existence. The Borrower will do or cause to be
done all things necessary to preserve and keep in full force and effect its
legal existence, rights and franchises.

                  3.2.5 Loan Proceeds. The Borrower will use the proceeds of the
Loans solely for the purposes set forth in Section 1.3.

                  3.2.6 Insurance. The Borrower will maintain with financially
sound and reputable insurers insurance with respect to its properties and
business against such casualties and contingencies as shall be in accordance
with the general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms, in such forms
and for such periods as may be reasonable and prudent.

                  3.2.7 Compliance with Laws. The Borrower will comply in all
material respects with (a) the applicable laws and regulations wherever its
business is conducted, (b) the provisions of its Organizational Documents, (c)
all material agreements and instruments by which it or any of its properties may
be bound, and (d) all applicable decrees, orders, and judgments. If any
authorization, consent, approval, permit or license from any office, agency or
instrumentality of any government shall become necessary or required in order
that the Borrower may fulfill any of its obligations hereunder or any of the
other Loan Documents to which the Borrower is a party, the Borrower will
promptly take or cause to be taken all reasonable steps within the power of the
Borrower to obtain such authorization, consent, approval, permit or license and
furnish the Lender with evidence thereof.

                  3.2.8 Indemnification. Borrowers shall at all times, both
before and after repayment of the Loan, at its sole cost and expense defend,
indemnify, exonerate and save harmless Lender and all those claiming by, through
or under Lender ("Indemnified Party") (to the extent not paid by Borrowers in
this Section 3.2.8 or under the applicable provisions of this or any other Loan
Document) against and from all damages, losses, liabilities, obligations,
penalties, claims, litigation, demands, defenses, judgments, suits, proceedings,
costs, disbursements or expenses of any kind whatsoever, including, without
limitation, reasonable attorneys' fees and experts' fees and disbursements,
which may at any time (including, without limitation, before or after discharge
or foreclosure of the Security Documents) be imposed upon, incurred by or
asserted or awarded against the Indemnified Party and arising from or out of:

      (i) any liability for damage to person or property arising out of any
violation of any applicable legal requirement by the Borrower,

      (ii) as a result of litigation that may arise in connection with the
Borrower's activities (excluding the Loan or the Loan Documents), or

      (iii) any and all liabilities, damages, penalties, costs, and expenses,
relating in any manner to any brokerage or finder's fees in respect of the Loan.

      Notwithstanding the foregoing, an Indemnified Party shall not be entitled
to indemnification in respect of claims arising from acts of its own gross
negligence or willful misconduct to the extent that such gross negligence or
willful misconduct is determined by the final judgment of a court of competent
jurisdiction, not subject to further appeal, in proceedings to which such
Indemnified Party is a proper party.

                  3.2.9 Costs and Expenses. Borrower shall pay all legal fees
reasonably incurred by Lender in connection with the implementation of the Loan
and the administration of the Loan, and reasonably incurred by the Lender in
connection with the enforcement of the Lender's rights under the Loan Documents.
Borrowers' obligations to pay such costs and expenses shall include, without
limitation, all attorneys' fees and other costs and expenses for preparing and
conducting litigation or dispute resolution arising from any breach by Borrower
of any covenant, warranty, representation or agreement under any one or more of
the Loan Documents. Unless an Event of Default has occurred and is then
continuing, the Lender shall use its best efforts to notify the Borrower prior
to the incurrence of any such cost or expense if the aggregate amount of such
costs and expenses in any one calendar year will exceed $5,000.00; provided,
however, that the failure to provide such notice shall not affect in any manner
whatsoever on the Borrowers' obligations hereunder.

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                  3.2.10 Transfer of Shares; Issuance of Additional Share. The
Borrower shall not sell, assign or otherwise encumber the Shares until the
Obligations are satisfied in full. The Borrower shall not consent to the
issuance of, or permit the Corporation to issue, any additional equity interests
in the Corporation.

                  3.2.10 Further Assurances. The Borrower will cooperate with
the Lender and execute such further instruments and documents as the Lender
shall reasonably request to carry out to their reasonable satisfaction the
transactions contemplated by this Agreement and the other Loan Documents.

      4. COLLATERAL SECURITY, PLEDGE

      As security for the prompt and full satisfaction and payment of the
Obligations, the Borrower hereby pledges and assigns the Shares to the Lender
and grants the Lender a security interest therein.

            (a) The Borrower shall deliver, upon the execution of this
Agreement, certificate(s) representing the Shares, endorsed in blank or with
appropriate stock powers duly executed in blank, to be held by the Lender, in
pledge, subject to the terms hereof.

            (b) The Lender shall be entitled to receive and hold in pledge
hereunder in connection with any of the Shares, any:

                  (i) stock certificate representing a stock dividend or in
connection with any increase or reduction of capital, reclassification, merger,
consolidation, or sale of assets, combination of shares or stock splits;

                  (ii) option, warrant, or right, whether as an addition to or
in substitution or in exchange for any of the Shares, or otherwise; and

                  (iii) dividend or distribution payable in cash or property at
such time, if at all, that the entire unpaid balance of principal of and
interest on the Note outstanding has become due and payable in accordance with
Article 5.

      The Parties acknowledge and agree that, except as provided in clause
(b)(iii) above, the Lender shall not be entitled to any interest in, any Lien
on, or to receive and hold in pledge, distributions made to the Borrower from
the Corporation, including without limitation distributions of cash received by
the Corporation in respect of the Corporation's interests in Receivables II-A,
LLC and Receivables II-B, LLC, and any and all such distributions referred to
above shall be owned solely by the Borrower, free and clear of Liens in favor of
the Lender.

5. EVENTS OF DEFAULT

      5.1 Default. If any one or more of the following events ("Events of
Default") shall occur and be continuing with respect to the Borrower, the entire
unpaid balance of principal of and interest on the Note outstanding shall
immediately become due and payable upon written notice to that effect given to
the Borrower by the Lender (except that in the case of the occurrence of any
Event of Default described in subparagraph 5.1.5 hereof, no such notice shall be
required), without presentment or demand for payment, notice of non-payment,
protest or further notice or demand of any kind, all of which are expressly
waived by the Borrower:

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            5.1.1 Payments. Failure by the Borrower to make any payment of
principal or interest upon the Note, and such failure shall continue for a
period of more than five (5) Business Days after written notice thereof shall
have been given to the Borrower by the Lender; or

            5.1.2 Covenants. Failure by a Borrower to perform or observe in any
material respect any of the covenants or agreements contained in Section 3.2
hereof; or

            5.1.3 Representations and Warranties. Any representation or warranty
made by the Borrower to the Lender hereunder or in connection with the making of
the Loans shall have been false or misleading in any material respect when made
or delivered; or

            5.1.4 Default under a Loan Document. Any other default in any
material respect in the performance of any term or provision of the Note, or of
any of the other Loan Documents, or a breach, or other failure to satisfy, in
any material respect, any other term, provision, condition or warranty under the
Note, or any other Loan Document, regardless of whether any then undisbursed
portion of the Loan is sufficient to cover any payment of money required
thereby, and the specific grace period, if any, allowed for the default in
question shall have expired without such default having been cured.

            5.1.5 Financial Status and Insolvency. The Borrower shall: (i) admit
in writing its inability to pay its debts generally as they become due; (ii)
file a petition in bankruptcy or a petition to take advantage of any insolvency
act; (iii) make an assignment for the benefit of creditors; (iv) consent to, or
acquiesce in, the appointment of a receiver, liquidator or trustee of itself or
of the whole or any substantial part of its properties or assets; (v) file a
petition or answer seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the Federal
Bankruptcy laws or any other applicable law; (vi) have a court of competent
jurisdiction enter an order, judgment or decree appointing a receiver,
liquidator or trustee of the Borrower, or of the whole or any substantial part
of the property or assets of the Borrower, and such order, judgment or decree
shall remain unvacated or not set aside or unstayed for sixty (60) days; (vii)
have a petition filed against it seeking reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under the
Federal Bankruptcy laws or any other applicable law and such petition shall
remain undismissed for sixty (60) days; (viii) have, under the provisions of any
other law for the relief or aid of debtors, any court of competent jurisdiction
assume custody or control of the Borrower or of the whole or any substantial
part of its property or assets and such custody or control shall remain
unterminated or unstayed for sixty (60) days; or (ix) have an attachment or
execution levied against any substantial portion of the property of the Borrower
or against any substantial portion of the Shares which is not discharged or
dissolved by a bond within sixty (60) days; or

            5.1.6 Loan Documents. If any Loan Document for any reason other than
the satisfaction in full of all Obligations shall cease to be in full force and
effect (other than in accordance with its terms), thereby preventing the Lender
from obtaining the practical realization of the benefits thereof, or if any Loan
Document shall be declared null and void, or if the Liens and security interests
purported to be created by any of the Loan Documents shall cease to be valid,
perfected, first priority (except as otherwise expressly provided herein)
security interests;

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            5.1.7 Judgments. One or more judgments or decrees shall be entered
against the Borrower involving a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of sixty (60) consecutive days, and the
aggregate amount of all such judgments exceeds $250,000.

            5.1.8 Change of Control. If a Change of Control shall occur.

            5.1.9 Default of Other Obligations. Any failure by the Borrower to
pay at maturity, or within any applicable grace period, any obligation for
borrowed money, or in respect of any capitalized lease, in an aggregate amount
exceeding $500,000, or any failure to observe or perform any material term,
covenant or agreement contained in any agreement by which the Borrower is bound,
evidencing or securing borrowed money, or in respect of any capitalized lease,
such that the holder or holders thereof or of any obligations issued thereunder
have accelerated the maturity thereof.

      5.2 Remedies. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Lender shall have accelerated
the maturity of the Loans, the Lender, if owed any amount with respect to the
Loan, may proceed to protect and enforce its rights by suit in equity, action at
law or other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Loan Agreement and the other documents
entered into in connection herewith or any instrument pursuant to which the
Obligations to the Lender are evidenced, including as permitted by applicable
law the obtaining of the ex parte appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Lender. No remedy
herein conferred upon the Lender is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law. In addition to all of its other rights
and remedies hereunder the Lender shall have all of the rights and remedies of a
secured party under the UCC from time to time and shall comply with all
procedures thereunder for disposition and sale of the Shares. The Lender shall
have the right to sell or otherwise dispose of all or any of the Shares subject
to appropriate UCC rules. Such sales may be adjourned and continued from time to
time, with or without notice. To enable the Lender to effect any such sale,
assignment and/or transfer and to take any action and to execute any instrument
which the Lender may deem necessary or advisable to accomplish the purposes of
this Agreement, the Borrower hereby makes, constitutes and appoints the Lender
as the true and lawful attorney, in its name, place and stead, and for its
account and risk, to make, executed and deliver any and all assignments or other
instruments which the Lender may deem necessary or proper to effectuate the
authority hereby conferred by signing the Borrower's name only or by signing the
same as its attorney-in-fact, as may be deemed by the Lender to be necessary or
proper in connection with any sale, assignment, or transfer of all or any part
of the Shares. The foregoing power of attorney is coupled with an interest and
shall be a continuing one and irrevocable so long as any portion of the
Obligations remains unpaid in whole or in part. The Lender may purchase all or
any part of the Shares at public sale or, if permitted by law, private sale,
subject to appropriate UCC rules, and in lieu of actual payment of such purchase
price, may set off the amount of such price against the Obligations.

      5.3 Remedies of the Essence. The various rights and remedies of the Lender
under this Agreement are of the essence of the Agreement, and the Lender shall
be entitled to obtain a decree requiring specific performance of each such right
and remedy.

      5.4 Recourse. The Loan shall be fully recourse to the Borrower and all of
its assets.

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      5.5 Distribution of Proceeds. In the event that, following the occurrence
and during the continuance of any Event of Default, with respect to the
realization upon any of the Shares, such monies shall be distributed for
application as follows:

      (a) First, to the payment of, or (as the case may be) the reimbursement of
the Lender for or in respect of all reasonable costs, expenses, disbursements
and losses which shall have been incurred or sustained by the Lender in
connection with the collection of such monies by the Lender, for the exercise,
protection or enforcement by the Lender of all or any of the rights, remedies,
powers and privileges of the Lender under this Agreement or any of the other
Loan Documents or in respect of the Shares or in support of any provision of
adequate indemnity to the Lender against any taxes or Liens which by law shall
have, or may have, priority over the rights of the Lender to such monies;

      (b) Second, upon payment and satisfaction in full or other provisions for
payment in full satisfactory to the Lender of all of the Obligations, to the
payment of any obligations required to be paid pursuant to the UCC; and

      (d) Third, the excess, if any, shall be returned to the Borrower or to
such other Persons as are entitled thereto.

      6. MISCELLANEOUS

      6.1 Notices. Any notices, elections or demands permitted or required to be
made under this Agreement shall be in writing, signed by the party giving such
notice, election or demand and shall be given either by personal delivery sent
postage prepaid by registered or certified mail, return receipt requested or
sent by overnight carrier, or via facsimile followed by certified mail and shall
be deemed to have been given when evidence of receipt is received by the sender
in each case addressed as follows:

      if to Lender:

                        Pemmil Funding LLC
                        70 East 55th Street, 7th Floor
                        New York, New York 10022
                        Attention:  Mr. Jay Chazanoff
                        Facsimile No.: (212) 350-9911

      if to Borrower:

                        DVL, INC.
                        70 East 55th Street, 7th Floor
                        New York, New York 10022
                        Attention:  Mr. Jay Thailer
                        Facsimile No.: (212) 350-9911

      with a copy to:

                        Mr. Alan Casnoff
                        4900 South Broad Street
                        Philadelphia, Pennsylvania  19112
                        Fax: 215-320-3785

<PAGE>

            A party hereto may change the address to which notices shall be sent
by written notice to all other parties hereto (said change of addresses to be
effective upon receipt by all other parties hereto).

            6.2 Lender's Right to Perform on a Borrower's Behalf. If the
Borrower shall fail to observe or perform any of the terms, conditions,
covenants and agreements to be observed or performed by it hereunder or under
the Note, the Lender may (but shall not be obligated to) do the same or cause it
to be done or performed or observed, either in its name or in the name and on
behalf of the Borrower, and the Borrower hereby authorizes the Lender so to do.

            6.3 Lender's Right to Use Agents and to Act in Name of Borrower. The
Lender may exercise its rights and remedies hereunder or under the Note through
an agent or other designee and, in the exercise thereof, the Lender or any such
other Person may act in its own name or in the name and on behalf of the
Borrower.

            6.4 Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of New York, without regard to
principles of conflicts of law thereof.

            6.5 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto were upon the same instrument.

            6.6 Entire Agreement. This Agreement embodies the entire agreement
among the Borrower and the Lender relating to the subject matter hereof and
supersedes all prior agreements, representations and understandings, if any,
relating to the subject matter hereof.

            6.7 Successors and Assigns. All of the provisions of this Agreement
shall be binding and inure to the benefit of the Borrower and the Lender and
their respective successors and assigns; provided, however, that the Borrower is
not permitted to make any assignment except with the prior written consent of
Lender.

            6.8 Captions. Captions to Sections and subsections of, and Schedules
and Exhibits to, this Agreement are included for convenience of reference only
and shall not constitute a part of this Agreement for any other purpose or in
any way affect the meaning or construction of any provision of this Agreement.

            6.9 Pronouns and Gender. All pronouns and variations thereof used
herein shall, regardless of the pronoun actually used, be deemed to refer to the
masculine, feminine, neuter, singular or plural as the identity of the person or
persons may, in the context in which such pronoun is used, require.

<PAGE>

      IN WITNESS WHEREOF, this Agreement has been executed as of the date and
year first set forth above.

                                   LENDER:

                                               PEMMIL FUNDING LLC

                                               By /s/ Jay Chazanoff
                                                  ------------------------------
                                                  Jay Chazanoff
                                                  Administrative Member


                                   BORROWER:

                                               DVL, INC.

                                               By /s/ Jay Thailer
                                                  ------------------------------
                                                  Name:  Jay Thailer
                                                  Title: Chief Financial Officer